GLAXOSMITHKLINE 1 GlaxoSmithKline Ltd strengths Names: Institution: GLAXOSMITHKLINE 2 GlaxoSmithKline Ltd strengths GlaxoSmithKline (GSK) has been in operation for the past sixteen years. During that period, the company has been experiencing continuous growth particularly due to the increased combined clientele, capital, and workforce that accompanied the merger that saw the creation of the company. As with many other mergers in the twenty-first century, GlaxoSmithKline has managed to accomplish most of its strategies which the individual companies could not have managed despite the flourishing demand for their products (Rashmi, 2017). Notably, the two companies had been experiencing challenges related to competition before the decision for a merger arose. Surprisingly, they were rivals in the pharmaceutical and health products industry, and this detrimentally affected their operations. Moreover, Holzweber, Holzweber, Lawson & Addison (N.D) note that competition has been attributed to the highest percentage of the collapse of companies due to its negative effect on pricing as each company strives to hold or expand its customer base and supersede the rival. However, the company has been doing well with a number of strengths being achieved and which have enabled GSK to expand its operations to more than a hundred countries. The following section will discuss a number of the strengths that the company holds and particularly above its rivals. A variety of quality and rare products The company has managed to establish a state-of-the-art laboratory through its extensive research and design (R & D) program whereby it commits huge investments. However, these investments have necessitated the company to increase its technology of manufacture and also the value of the products. GSK has also managed to increase its products to incorporate a wide variety unlike most of its competitors. Interestingly, most of this company’s drugs are antiviral therapies, nervous system, vaccines, and respiratory GLAXOSMITHKLINE 3 system. Few companies manufacture drugs of the nervous system, which means that this company always has the upper hand when it comes to competition and sales. Additionally, other fields such as vaccines are essential, which means that their demand mainly remains constant. Notably, GSK recently announced its commitment towards R&D by setting aside of more than $ 97 million whose aim was to improve its drugs and venture into areas where little success exists (GlaxoSmithKline, 2015). In R&D alone, the company had more than 13, 000 employees and researchers as at 2013 (Karus, 2015). One such venture is the HIV/AIDS which, if it succeeds, will make the company among the most successful in medical discoveries. Most of its success has arisen from its adoption of advanced technology. Notably, it goes a notch higher to seek a partnership with renowned tech firms such as McLaren Technology Group to facilitate its conquest. Vast resources that facilitate its operations As at 2015, the company was already operating in more than 115 countries globally. The company has grown to be one of the most successful in its field whereby it currently ranks at number six globally. Interestingly, its high growth rate indicates that it might soon be surpassing some of the leaders in the pharmaceutical industry. With more than 96,000 employees, and with more than 13,000 being in the R&D sector alone, the company is able to research and manufacture a large variety of drugs which reach millions of its clients (GlaxoSmithKline, 2015). Its net income of more than $ 8 billion and an operating income of more than $ 10 billion makes it one of the largest corporations globally. The massive income has enabled the company to support some of its charitable events such as the free supply of drugs and grants to some needy countries and particularly in Africa to support the management of some deadly diseases such as HIV/AIDS (Rashmi, 2017). Some of its products are unmatched in both quality and demand. Its consumer products, for example, Sensodyne and Aquafresh, are among the most selling and longest existing in the industry GLAXOSMITHKLINE 4 (GlaxoSmithKline. & American Dental Association, 2007). The company’s financial might has enabled it to operate uninterruptedly despite experiencing some instances that cost it massive funds. Surprisingly, the company was not shaken by the $ 3 billion penalties that it received from the US government in a recent civil suit involving its products (Gibson, N.D). Moreover, not many companies would survive such a huge fine leave alone maintaining their operations seamlessly. Due to its large number of facilities and products, coupled with its ability to develop new products, the company has in the recent past sold a number of its products while buying other companies’ facilities to add to its existing ones. In 2011, for example, it shed off 17 brands to Prestige Brands at the cost of $ 660 million (Mehmood, 2012). It has managed to take over other companies amounting to billions of shillings such as Human Genome Sciences in 2013 in a deal worth $ 3 billion. In the recent past, the company has also engaged in expansion of its facilities with the creation of new manufacturing units and facilities. Notably, it was able to allocate at least 500 million pounds for the construction of manufacturing facilities in England and a further $ 1 billion to raise its stake in its Indian subsidiary in a move to have more control and consequently increase its operational facilities (GSK, 2015). GLAXOSMITHKLINE 5 References Gibson, Liza. (n.d.). GlaxoSmithKline to publish clinical trials after US lawsuit. BMJ Publishing Group Ltd. GlaxoSmithKline Pharmaceuticals Ltd. (India). (February 26, 2015). GlaxoSmithKline Pharmaceuticals Ltd. (India) - Annual Report - December 31, 2014. Reportal. GlaxoSmithKline. & American Dental Association. (2007). OralLongevity. Chicago, IL: American Dental Association. Holzweber, Markus, Holzweber, Markus, Lawson, Virginie, & Addison, Adelaide. (n.d.). GlaxoSmithKline: the shifting from Patented to Generic Drugs. Karus, Kärt. (2015). Definition of Relevant Product Market in Reference to R&D Poles in Pharmaceutical Sector Mergers. Lunds universitet/Juridiska institutionen. Mehmood, Faisal. (2012). Growth by Merger - A long-term analysis of GlaxoSmithKline. Rashmi, R. (January 01, 2017). Corporate Social Responsibility of Pharmaceutical Industry towards Access to Medicine: A Case Study of GlaxoSmithKline. GlaxoSmithKline Ltd. (2016). GKS Annual report 2015. Available from http://www.gsk.com/en-gb/investors/corporate-reporting/annual-report/ 1 GlaxoSmithKline Weaknesses GlaxoSmithKline Ltd Weaknesses Names: Institution: GlaxoSmithKline Weaknesses 2 GlaxoSmithKline Ltd Weaknesses GlaxoSmithKline (GSK) is a company that has been in operation for a long time. It ranks among the leading pharmaceuticals both in company value and the products that it manufactures. Its large size, many subsidiaries, and a number of conglomerates give it an upper hand in the industry. Additionally, the company can afford advanced researches on various items even when the process of achieving the desirable results gets prolonged. As with every other company, GSK has its strengths and weaknesses. Despite these weaknesses having little effect on the operation and performance of the company, these weaknesses create a significant setback to the jurisdiction where the company operates. The following section will analyze some of the major weaknesses of GKS, taking both an internal as well as an external perspective. Content, labeling, and advertisements of GKS brands GKS has a very wide variety of brands which range from pharmaceuticals to lifestyle products. Within the market, most of these products are undisputable and tend to have little competition. However, the company has in the past faced a number of issues that created conflict with both the authorities as well as the general public. Ribena, which is one of the earliest products of the company, is one of such products. Initially, the product was labeled to create a clinical aspect with inscriptions "widely used in hospitals and clinics" (Wetherington, Pfister, Banfield, Stone, Krishna, Allerheiligen & Grasela, 2009). However, this created an issue due to widespread concern over its contents. The product was highly criticized over the lack of medical value, a factor that hugely discredited its fame among the public. During the world war, this drink was often served to children as a source of the vitamin. However, the early 2000s issue regarding the drink led to widespread criticism after it was realized that its sugar contents were exceeding the threshold for major hospital use (Norman, 2002). Notably, GlaxoSmithKline Weaknesses 3 it is recommended that sick people, as well as children, consume majorly low-sugar but highenergy products for the purposes of maintaining or restoring their health. Despite the attempts by the company to give it a health reputation, this reputation was hugely affected when the concerns were raised. It is now yet known whether this issue played a part in the sale of Ribena brand by the company in 2013. Another major branding and advertising issue that brought devastating impacts to the company was the 2010 collision with the US authorities in 2010. In this case, GKS was fined a whopping $3.1 billion which, surprisingly, is the highest fine ever imposed on a company in the pharmaceutical industry by the US judiciary (Gibson, N.D). In this case, the company was charged under the False Claims Act. Just like the issues raised in the case of Ribena, there were concerns over adulterated drinks in the early 2000s by the company which instigated the Federal Drug Agency (FDA) to visit the company and directed the rectification of the issue. However, the issue was never rectified. Many of the disputed drugs were in those involved in the treatment of skin problems as well as diabetes. The frequent complaints made it escalate to high levels that created issues with the authority. After a dispute was filed, the company was forced to close down the Puerto Rico factory in the year 2009 (Wetherington, Pfister, Banfield, Stone, Krishna, Allerheiligen & Grasela, 2009). Unfortunately, the case proceeded until 2010 when the fine was imposed. Patent disputes over the brands Due to the nature of the products that the company manufactures, most of them are covered by patents. These patents are meant to protect the works of the company which majorly arise after years of lengthy research. The company has the one of most advanced R&D program globally and invests a lot of funds to research the drugs before manufacturing sets in (GlaxoSmithKline, 2015). In order to protect the business and guarantee a monopoly GlaxoSmithKline Weaknesses 4 and total control over the product, the company as well as other competitors secure the right to the products. Over the past, the company has been engaged in a number of patents that have a huge effect on its operations (Holzweber, Holzweber, Lawson & Addison, N.D). In one instance, the company was involved in a number of antitrust cases with the US government over that led to revoking of some patents due to the discredit that arose as a result of irregular filing and documentation. At one time, the company was charged over a number of conspiracies and irregularities in exercising its rights and had its license revoked, and the patent declared invalid (BMJ, 2009). In the past, the company practiced cross-licensing on its patents that allowed the large companies to trade in its products while eliminating small companies. This meant that most of these drugs could only be traded on a large scale. This led to detrimental effects on its sales since it limited the availability and distribution of the product. The company has also faced a number of other fines including a 37 million pounds early this year over irregular price manipulation and unfair competition strategies in the UK (BMJ, 2009). Its officials have also been involved in a number of briberies that led to a number of case suits, especially in the UK and Italy. The above-mentioned issues have led to a discrediting effect on the image of the company and significantly affected its sales. However, the company has been striving to adjust to the situation by initiating various corrective measures. 5 GlaxoSmithKline Weaknesses References Gibson, Liza. (n.d.). GlaxoSmithKline to publish clinical trials after US lawsuit. BMJ Publishing Group Ltd. GlaxoSmithKline Pharmaceuticals Ltd. (India). (February 26, 2015). GlaxoSmithKline Pharmaceuticals Ltd. (India) - Annual Report - December 31, 2014. Reportal. Holzweber, Markus, Holzweber, Markus, Lawson, Virginie, & Addison, Adelaide. (n.d.). GlaxoSmithKline: the shifting from Patented to Generic Drugs Norman, P. (January 01, 2002). GlaxoSmithKline plc: analysis of patenting 1998 2001. 12, 9, 1407-1415. Weak Swiss law allows tobacco sponsorship of tennis tournament to go ahead . Putin attacks firms for paying doctors to prescribe their drugs . GlaxoSmithKline is told to pay family $2.5m after jury finds paroxetine caused son's heart defects. (October 26, 2009). Bmj : British Medical Journal, 88, 7727, 942. Wetherington, J. D., Pfister, M., Banfield, C., Stone, J. A., Krishna, R., Allerheiligen, S., & Grasela, D. M. (September 01, 2010). Model-Based Drug Development: Strengths, Weaknesses, Opportunities, and Threats for Broad Application of Pharmacometrics in Drug Development. The Journal of Clinical Pharmacology, 50. Running head: SWOT ANALYSIS 1 SWOT Analysis Name Institutional Analysis 2 SWOT ANALYSIS SWOT Analysis The organization GlaxoSmithKline was formed in 2001, and this was because of the merger between the two companies SmithKline Beecham and Glaxo Wellcome, which were two major pharmaceutical companies. The organization deals with pharmaceuticals, consumer health products, and vaccines. The organization has its headquarters in the UK and has branches in over 100 countries globally. The mission statement of the organization is to help people do more, feel better, and live longer(Ferdous,2015). The organization looks to increase growth, reduce risk, and improve its long-term financial performance. It aims to do this through growing a balanced global business, delivering more products of value, and simplifying the operating model of business. The company looks to create a balanced business portfolio and deliver sustainable sales with the aim of corporate growth. It also looks to deliver more products of value through a variety of products. The company also looks to change how it operates to reduce complexity and increase efficiency. It functions through responsible business aimed at delivering success and ensuring that its values are part of its culture. The organization is listed on the New York Stock Exchange and continues to face stiff competition especially from companies such as Pfizer and Sanofi.Using a SWOT analysis, it will be possible to further analyze the strengths and weaknesses of the organization(Ferdous,2015). The organization has continually benefitted from the vast resources and funds available which have enabled it to employ a strong sales and marketing unit. The company has embarked on a vigorous marketing campaign that has been undertaken by its marketing and public relations departments. The organization is the biggest investor in research and development in the pharmaceutical field in the UK. 3 SWOT ANALYSIS It continues to provide utilization and manufacturing in the field of chemistry as well. The organization has over 90000 employees who specialize on exploring new markets. However, there are a number of shortcomings that the organization continues to face in the line of operations. One of these weaknesses is the fact that the increased productivity often leads to increased cases of expired bulk products. Furthermore, there are increasing issues of safety of some of the drugs that the organization produces, and this has hampered sales(Ferdous,2015).Due to mass production, the organization has also repeatedly called back a number of its products due to quality and quantity issues. It has dented the image of the organization and has stained its record and reputation. The organization also has managed to identify a number of opportunities in the market. It has singled out the opportunity present in the oncology market as well as biologics. It has also managed to realize the opportunity to facilitate potential mergers due to its stable cash flow position. Through its mergers with other pharmaceutical organizations, it has developed state of the art laboratories that have enabled the amassment of more funds through profit. The company has also capitalized on opportunities to expand into new markets through successfully expanding its operations as well as client base (Ferdous, 2015). However with these opportunities also come a number of threats to the effectiveness of the organization. One major threat is the high number of unsuccessful new products due to lack of customer awareness concerning these products. Another major threat to operations for the organization is the fact that there are increasing environmental regulation which has become stricter. The fluctuation of the global economy is another major issue that continues to affect operations of the company. Economic instability throughout the world has slowed down sales and reduced the market effectiveness of the company. 4 SWOT ANALYSIS Another major issue that has a reasonable impact on the company is the threat of conventional forms of medicine in recent times. Herbal medicine continues to be accepted recently, and this has affected the operations of the company and reduced sales of its products. Furthermore, these products have fewer side effects and on many occasions have proven to be more effective (Ferdous, 2015).Leadership wrangles within the organization are another major issue of concern within the company. It has led to internal instability and slowed down operation. However, the company maintains a stable position in the pharmaceutical market and is a renowned global brand. It continues to rake in huge annual profits and attract more clients as well as investors. The company does not have much concern about the threat of new competitors in the market. The reason for this is because the cost of entering the pharmaceutical industry is very high and many potential entrants are usually discouraged by this. Another point to note is that local governments usually impose strict measures to organizations wishing to enter the pharmaceutical industry (Ferdous, 2015).However, the increasing occurrence of generic medication in the market has become an issue of concern and has reduced sales of the company products significantly. These substitutes offer similar products but use different brand names and offer cheaper pricing for the products. However, despite such occurrences, the brand continues to embark on an effective marketing strategy that has seen it maintain itself as the preferred global pharmaceutical brand. 5 SWOT ANALYSIS References Ferdous, Z. (2015). Performance analysis of GlaxoSmithKline Bangladesh Limited Islam, K., & BA, C. C. Critical Analysis of GSK's (GlaxoSmithKline) Business Strategy: Opportunities, Limitations and Recommendations to achieve Sustainability.
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